The Impacts Of Financial Management, Social Network, Platform And The Mediation Of Business Intelligence On The Performance Of Equity Crowdfunding Funded Firms In Malaysia
The efficiency of business entities in manipulating the existing resources and tracking the opportunities available is an advantage to ensure that the business continues to grow, be competitive and sustainable. Often associated firms, especially those involving small and medium enterprises (SMEs)...
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| Summary: | The efficiency of business entities in manipulating the existing resources and tracking
the opportunities available is an advantage to ensure that the business continues to grow,
be competitive and sustainable. Often associated firms, especially those involving small
and medium enterprises (SMEs), face financial constraints and issues related to their
financial management (FM). The introduction of equity crowdfunding (ECF) has given
a new dimension of alternative finance in Malaysia. Since its introduction in 2015 until
2019, 77 issuers have successfully secured ECF funds. The ECF ecosystem
demonstrates that ECF platforms (PP) play a role in uniting fundraisers to help SMEs
raise funds and investors to reap investment returns. Thus, the study is based on the
ECF ecosystem, which looking at the internal (IF) and external factors (EF). IF is the
aspect of financial management, which includes a computerized accounting system
(AIS), financial analysis (FAR), financial planning (FPC), and working capital
management (WCM). Meanwhile, EFs are the social network (SN) and ECF platform
(PP). The hypotheses drew that these factors positively affect the performance of the
firm. This performance is measured according to financial measurements (Model 1) and
customer performance (CP) (Model 2). Digital questionnaires were sent covering a
population of 231 respondents, representing 77 issuers who successfully raised ECF
funds in 2016-2019. To ensure that the survey reached the respondents, this study used
"authority of sender" and "pleading for help" approaches. Only 92 respondents met the
required criteria. This study adopts RBV theory as an underpinning theory and the
integration with the Signaling Theory, the Theory of Financial Bricolage and Social
Capital were the supporting theories. This study used SPSS 20.0 and Smart-PLS 3.0 for
data analysis. The results found that the determination of the measurement basis is
significant because the results obtained vary. Model 1 only supports FPC, while Model
2 supports AIS, FPC, WCM, and PP. PP has a substantial effect on CP. However, FPC
shows adverse effects. Perhaps, it is due to the financial planning fails to consider
factors that can increase customers’ performance. Today, to be competitive, business
entities are not immune to the influence of rapidly evolving technology. Thus, this study
considers business intelligence (BI) factors influencing FAR and FPC, and
subsequently, firm performance. BI partially affects performance for both models. This
study also opens up space for future research: (i) to investigate the extent of loan-based
crowdfunding (P2P)’s effect on SME performance and to compare ECF and P2P on
SME resilience; (ii) the driving factors influencing SMEs in Malaysia to obtain ECF
funds; (iii) the impact of Covid-19 on ECF and P2P platforms that are still active during
the pandemic; and (iv) a study on the performance of ECFs using Sharia-based products
available in Malaysia. Finally, this study can be used as an entrepreneurship module to
provide information to existing entrepreneurs and government agencies such as MARA
and SME Corp. SMEs can gain more information and knowledge about the potential of
ECFs. Early exposure for entrepreneurship students to the flexibility of crowdfunding,
particularly ECF and new financial technologies (fintech) that influence the
entrepreneurial landscape over time, is deemed necessary. |
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